Skip Consulting helped Schmidt Roofers put various cost saving techniques into place. The contract specifies that Skip will receive a flat fee of $70,000 and an additional $19,000 if Schmidt attains a...

Skip Consulting helped Schmidt Roofers put various cost saving techniques into place. The
contract specifies that Skip will receive a flat fee of $70,000 and an additional $19,000 if Schmidt
attains a target amount of cost savings. Skip estimates a 20% chance that Schmidt will reach the
target for cost savings. Assuming that Skip uses the expected-value approach, what is the
transaction price for this product?
a. $19,000
b. $70,000
c. $73,800
d. $89,000